Questions 1-30 Multiple Choice (Cirele the best choice) Questions 1 through 3 Ba

Question

Questions 1-30 Multiple Choice (Cirele the best choice) Questions 1 through 3 Barry sold depreciable property used in his business to Ken for $125,000 cash plus a bond redeemable in 5 years for $70,000, but currently trading on the NYSE for $65 000. The property cost Barry $320,000 plus $15,000 in capital improvements and had total accumulated depreciation at the time of the sale of $175,000. 1. What is the amount realized on the sale of the depreciable property? a. $185,000 b. $150,000 c. $50,000 d: $190,000 e. $125,000 2. What is the adjusted basis of the property at the time of the sale? a. $185,000 b. $160,000 c. $145,000 d. $175,000. e.None of the above. 3. What is the recognized gain or loss a. b. c. d. e. $45,000 Gain $175,000 Loss $30,000 Gain $45,000 Loss None of the above. 4. During 2017, Anna had the following transactions: Salary Interest income on IBM bonds Damages for physical personal injury (car accident) Punitive damages (same car accident) Cash dividends from Chevron Corp Stock

Explanation / Answer

Answer = 1) Amount realized from the sale of depreciable property = $            1,25,000.00 Answer = Option E = $ 125,000 Answer =2) Adjusted Basis = Cost of the Property - Accumulated Depreciation Adjusted Basis = $ 320,000 + $ 15,000 - $ 175,000 Adjusted Basis = $ 160,000 Answer = Option B = $ 160,000 Answer =3) Book value of the assets = $ 320,000 + $ 15,000 - $ 175,000 Book value of the assets = $ 160,000 Gain or Loss = Sales Value - Book Value Gain or Loss = $ 125,000 - $160,000 Gain or Loss = $ 35,000 Answer = Option E = None of the above Answer = 4 During the 2017 Anna have the redemable bond and bonds are carrying the interest So, Answer = Interest income on IBM Bonds

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